VERBATIM Ltd, of Limerick, one of Ireland's largest plants involved in the manufacture of magnetic information storage media (floppy disks) yesterday made 220 staff redundant at the Raheen Industrial Estate.
The company, which has its headquarters at Sunnyvale, California, began production in Limerick in May 1979 with a £1 million investment negotiated by the IDA and in 1985 employed more than 750 people. Three years later it was taken over by the Eastman Kodak Company and was the first in the world to produce the 14-inch optical disk with a £60 million investment by the American company.
In 1990 the company was taken over by Mitsubishi Kasei when the senior vice-president, Mr Nicky Hartery, a former managing director of the Limerick plant, said that the jobs of the 600 people then employed were very secure.
Mr Cyril Mullins, human resources manager at the plant, said yesterday in a statement that "due to the market decline in the demand for floppy disks, Verbatim has decided to reduce its output of disks at the Limerick site by approximately 40 per cent".
In addition, he added, a decision had been taken to close its media "facility" at Raheen because of a reduction in demand.
He said: "Unfortunately this will result in the loss of 160 permanent and 60 temporary jobs in the Limerick factory.
Mr Mullins said the lack of orders was due to the fact that many business firms had gone over to CD-Rom, but the company had not yet switched to this production in Limerick.
Asked about the position of the workers, who are mainly women, he said that in addition to statutory redundancy, they were being given an attractive package.
The redundancy of 220 workers came as a surprise to Limerick business interests. One public figure said: "We are extremely surprised because the company was noted for its successful management."
Mr Tony Lowe, SIPTU branch secretary, said: "It is a major loss to the city, but fortunately we have a number of highly successful plants on the same industrial estate.
Mr Lowe said that the company had never recognised a trade union. "This is unfortunate for the workers, but we tried on several occasions to gain recognition without success although we once had 90 members," he said.
When Mr Michael Noonan, then Minister for Industry and Commerce, announced the investment of £60 million in the company in 1987, he said the new company was expected to become a world leader in the technology, making the Limerick investment a significant negotiating coup for the IDA and an important new strategic investment for the electronics industry in Ireland".